AfDB to Provide $500m Budget Support to Nigeria Amid Economic Reforms

The African Development Bank (AfDB) has announced plans to extend $500 million in fresh budget support to Nigeria this year, as part of a $1 billion two-year programme aimed at strengthening the country’s fiscal resilience and driving economic reforms.

Bode Oyetunde, Executive Director representing Nigeria and São Tomé and Príncipe on the AfDB Board, disclosed the development on Monday during the Nigerian Economic Summit in Abuja. He said the facility, which requires board approval, could be concluded before the end of the year.

Oyetunde highlighted that the bank’s support reflects Nigeria’s “bold and aggressive macroeconomic reforms” under President Bola Tinubu, who assumed office in May 2023.

“We have been working strongly to support Nigeria’s reform agenda under President Tinubu. Given these reforms, it was important to provide assistance,” Oyetunde said on the sidelines of the summit.

The $500 million marks the second tranche of the two-year, $1 billion budget support initiative. The first tranche of $500 million was disbursed in 2024. Nigeria had requested $1.5 billion, but the AfDB approved $1 billion over two years.

Since taking office, President Tinubu’s administration has implemented sweeping economic measures, including the removal of long-standing fuel subsidies, unification of the foreign exchange market, and comprehensive tax reforms aimed at stabilising public finances, attracting investment, and restoring economic confidence.

Oyetunde added that the AfDB’s engagement would focus on supporting fiscal discipline and power sector reforms, critical areas underpinning sustainable growth and job creation.

The multilateral lender’s endorsement comes amid renewed investor interest in Nigeria’s reform programme, signalling confidence in the government’s efforts to address structural economic bottlenecks. Analysts say the support could catalyse additional multilateral and private sector funding while easing fiscal pressures on the federal government.